As federal funding faces potential cutbacks, a wave of concern rises among advocates and officials who are calling on Congress to revisit proposals believed to be vital for maintaining social service programs.
The implications of these changes could be particularly severe for Arizona, affecting a significant portion of its population, including those reliant on child welfare services, disability support, and care for the elderly.
Arizona’s Medicaid expenses are currently supported by federal funding, which covers about half of the costs overall. Some specific populations benefit from a more substantial federal contribution of up to 90% or more. However, a nationwide proposal threatens to reduce this financial support.
AHCCCS Director Carmen Heredia emphasized that state law mandates could lead to program reductions if federal backing decreases.
“We would then have to make those changes and have a decision to make: Should we cover this population as a state? Should we backfill some of this funding loss? I’m told that that’s not possible,” Heredia explained.
Heredia warned that scaling back support could trigger state legislation, resulting in further funding cuts.
Governor Katie Hobbs expressed concern, stating, “Hundreds of thousands of Arizonans losing their access to healthcare. Rural hospitals having to close because they’re back-providing a level of uncompensated care that they can’t sustain, which is where we were when we passed Medicaid expansion to begin with.”
The proposed cuts could impact Medicaid funding by $1.5 billion to $2 billion, in addition to other programs such as the Supplemental Nutrition Assistance Program (SNAP).
Wesley Tharpe from the Center on Budget and Policy Priorities noted the historical role of the federal government in covering SNAP benefits.
“If Arizona had to pay 25% of the cost of SNAP benefits,” he mentioned, “that would require around another $500 million a year to support that same level of services, which I, again, based on revenue trends and the size of other state necessities, would be something that the state would struggle mightily to fill.”
Research from the center highlights that the current proposals could potentially strip over 900,000 Arizonans of some or all of their nutritional assistance.
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